Shared Ownership HELP!

MoodyFirstTimeBuyer

Hello 

I'm in need of advice.

I'm currently considering a shared ownership 2 bed, 2 bath flat for sell in Clapham, South West London.

The breakdown of cost and % share is as follows:

Full Market Value: £ 610,000.00 

Affordable Share: 49% 

Confirmed Deposit Amount: £22000 

Estimated Loan Amount:£276900 

Rent Payment: £ 268.00 

Service Charge: £ 200.00

Estimated Mortgage Payment: £1435 

Lease: 107 years

The current owner has been there 8 years and is selling due to a breakup. 

I currently earn 80k per year and have around 22-27k in deposit.

As a single person buying, I'm struggling to find a 1-2 bed in a decent part of London and ideally want to stay in the area I've rented in the last 6 years.

I know the pitfalls of shared ownership but I wonder what other options I have (other than to move out of London) to afford a decent property. Despite being on 80k it's actually difficult to save when I'm paying 1.7k in rent each month and even if I aggressively save, still not being able to buy anything decent enough and on my own.

Shared ownership seems like a good option for me to buy a big property in a nice area.

Perhaps I could rent out other room to cover cost?

What are thoughts?

gwynlas

Looking on Right**** there are a number of 2 bed flats in what they consider Clapham from £400K upwards though some appear ex LA. 
Any rent is dead money and whilst shared ownership might offer a more attractive property you ae stuck with this unless you can afford to staircase to 100%, I beleive anything over 60% being hard to sell.
Renting a room is a good idea and I have known someone in London with a one bed flat setting up both rooms a studios sharing kitchen and bathroom.
The ideal would be to let out a ensuite room Mon- Fri so you need have minimal interaction

Bonniepurple

I used to live in a shared ownership (25%) house found the following:

Pros:
Cheap rent
Security 

Cons:
The HA weren’t interested in anything. It was a repossession and uninhabitable when we bought it. They didn’t bother to view it, and there was no rent rebate.
Any money we spent we only got a quarter of its value (eg new boiler cost £3000, we paid for it all but only got a quarter of the corresponding price increase)
Although the house was worth overall approx £160k (up from the (112k when we bought), we only received £40k as that was our share.  We paid £28,125 originally.  It meant that the next house was a large stretch financially.

caprikid1

For me shared ownership is for house builders not buyers.

Shared Ownership allows property prices to stay artificially high, it allows someone on your salary access to a £600K flat so finds a buyer where one did not exist. At the lower end of the scale it may be an alternative to social housing.

I would have thought your salary would allow you to borrow c£440,000 ? If you saved hard to get a bigger deposit you could be looking at £500,000 ?

On your salary your deposit seems quite low ?

MEM62

For me, shared ownership has too many downsides.  Maintenance at £200 per month is expensive too - and you have not control over it.  I sold a flat last year and my maintenance bill was £90 per month.  

Deniseconfused

That rent does not sound right for 51% of the property. Have you checked that is definitely right. 

Re shared ownership. Its great if someone had to go onto Universal credit. UC pay the rent, ground rent and the service charge. Only the mortgage to cover 

MoodyFirstTimeBuyer

Deniseconfused said:

That rent does not sound right for 51% of the property. Have you checked that is definitely right. 

Re shared ownership. Its great if someone had to go onto Universal credit. UC pay the rent, ground rent and the service charge. Only the mortgage to cover 

I thought the same thing as well! it seems to be what the housing association has advertised on their website and also confirmed by the current owner of the share (who has been there for 8 years and is moving on due to splitting with her partner). 

MoodyFirstTimeBuyer

MEM62 said:

For me, shared ownership has too many downsides.  Maintenance at £200 per month is expensive too - and you have not control over it.  I sold a flat last year and my maintenance bill was £90 per month.  

Very true, but my only thought was that isn't that the same with all flats in London via leasehold?

MoodyFirstTimeBuyer

caprikid1 said:

For me shared ownership is for house builders not buyers.

Shared Ownership allows property prices to stay artificially high, it allows someone on your salary access to a £600K flat so finds a buyer where one did not exist. At the lower end of the scale it may be an alternative to social housing.

I would have thought your salary would allow you to borrow c£440,000 ? If you saved hard to get a bigger deposit you could be looking at £500,000 ?

On your salary your deposit seems quite low ?

My outgoings are quite a bit - I can probably save around 400 to 500 pounds a month if I save aggressively, but feels like it will take a long time to save enough of a deposit to just afford a 1 bed in London and have enough left over after all the other associated costs (e.g. emergency fund). 

The reason I thought about SO was because of the ability to go for something that I would not ever be able to afford on my own in a decent part of London.  

Just feels like I'm stuck currently - unless I decide to just give up on living in London and move further out. 

ReadySteadyPop

gwynlas said:

Looking on Right**** there are a number of 2 bed flats in what they consider Clapham from £400K upwards though some appear ex LA. 
Any rent is dead money and whilst shared ownership might offer a more attractive property you ae stuck with this unless you can afford to staircase to 100%, I beleive anything over 60% being hard to sell.
Renting a room is a good idea and I have known someone in London with a one bed flat setting up both rooms a studios sharing kitchen and bathroom.
The ideal would be to let out a ensuite room Mon- Fri so you need have minimal interaction

No it isn`t, it is a cost for a service, negative equity on a SO flat or mortgage debt is dead money because you still have to pay it back, the OP needs to move out of London or get something that is commutable but cheaper.

ReadySteadyPop

caprikid1 said:

For me shared ownership is for house builders not buyers.

Shared Ownership allows property prices to stay artificially high, it allows someone on your salary access to a £600K flat so finds a buyer where one did not exist. At the lower end of the scale it may be an alternative to social housing.

I would have thought your salary would allow you to borrow c£440,000 ? If you saved hard to get a bigger deposit you could be looking at £500,000 ?

On your salary your deposit seems quite low ?

Exactly, more and more younger people are seeing this though and just staying at home or renting cheap flatshares.